Category Archives: Asset Sales and Acquisitions

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Double Whammy: In a Sweeping New Opinion, the Ninth Circuit Creates a New Mechanism for Completely Wiping Out Unexpired Leases in Bankruptcy, and Also Undercuts a Critical Protection for Buyers in 363 Sales

In In re Spanish Peaks Holdings II, LLC, Case No. 15-35572 (9th Cir. Sept. 12, 2017), the Ninth Circuit Court of Appeals held that a bankruptcy trustee may use Section 363(f) of the Bankruptcy Code to sell real property free and clear of unexpired leases without affording the non-debtor lessees the right to retain possession … Continue Reading

Continuity of Enterprise is Enough for Successor Parties to be Liable

Successor liability is often a concern for the acquirer when purchasing substantially all of a seller’s assets.  While this risk is well known, the circumstances under which an acquirer will be found liable under the theory of successor liability are less clear.  The recent decision in Call Center Techs., Inc. v Grand Adventures Tour & … Continue Reading

Delaware Court Provides Critical Guidance as to the Commercial Reasonableness of a UCC Article 9 Foreclosure Sale

Secured lenders often resort to non-judicial foreclosure sales of personal property upon a borrower’s default. Article 9, Part 6 of the Uniform Commercial Code requires that every aspect of such a sale must be commercially reasonable. However, the courts have historically provided little guidance as to what exactly constitutes a commercially reasonable sale. Fortunately, the … Continue Reading

New Change To Required Language For Foreclosure Notices Under California Civil Code § 2924c

Effective as of January 1, 2011, the language prescribed for all notices of default recorded pursuant to Section 2924 et seq. of the California Civil Code has changed. Despite the fact that this change became effective as of the beginning of this year, some foreclosure trustees are still using old forms that do not comply … Continue Reading

One’s Crisis is Another’s Opportunity: Section 363 Sales

With the increasing numbers of companies which were once thought to be giants of industry filing for bankruptcy, more opportunities to purchase major assets are becoming available to savvy buyers looking to expand their business or asset base. The Bankruptcy Code provides debtors with the ability to liquidate all or a part of their assets through … Continue Reading

The Precedential Value of an Unprecedented Sale – Lessons from Chrysler

On June 10, 2009, the sale of substantially all of Chrysler’s assets closed, just 42 days after the country’s third largest automaker filed for bankruptcy protection. The closing followed a contentious sale hearing before the Bankruptcy Court, an expedited appeal to the Second Circuit Court of Appeals and a brief stay imposed by the United States … Continue Reading

World Health Alternatives Upholds a Secured Creditor’s Carve-Out Inuring Solely to the Benefit of General Unsecured Creditors

In In re World Health Alternatives, Inc., Case No. 06-10166 (July 7, 2006), the Bankruptcy Court for the District of Delaware held that—notwithstanding the Third Circuit’s recent opinion, In re Armstrong World Indus., Inc., 432 F.3d 507 (3d Cir. 2005)—a secured creditor "give-up" or "carve out" that inures solely to the benefit of general unsecured … Continue Reading

Internal Revenue Bulletin No. 2006-22 Sets Forth Procedures for Prompt Determination of Unpaid Tax Liabilities of a Bankruptcy Estate

On May 30, 2006, the Internal Revenue Service (IRS) published Internal Revenue Bulletin No. 2006-22, Revenue Procedure 2006-24.  This bulletin sets forth the steps for a bankruptcy trustee or debtor in possession to follow in order to obtain a prompt determination by the IRS of any unpaid tax liability of the estate incurred during the … Continue Reading

California Court of Appeals Disagrees With Sherwood Partners and Holds That California Preference Laws Are Not Preempted by the Bankruptcy Code

On May 31, 2006, the California Court of Appeal for the Second Appellate District, in Haberbush v. Charles and Dorothy Cummins Family Ltd. Partnership, Case No. B175947, disagreed with the Ninth Circuit’s majority opinion in Sherwood Partners v. Lycos, 394 F.3d 1198 (9th Cir. 2005) and held that California Code of Civil Procedure section 1800 is not preempted by the federal … Continue Reading

“In re Submicron”: Credit Bidding Revisited

In “In Re: Submicron Systems Corporation,” ___ F.3d ___ (3rd Cir. 1/6/06), the Third Circuit affirmed the approval of a Bankruptcy Code Section 363 asset sale (over the objection of the Plan Administrator (the “Estate”)) to a newly formed company (“Newco”) comprised of (i) a third party (“Sunrise”), and (ii) pre-petition secured lenders (the “Lenders”), … Continue Reading

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